US slaps new sanctions on Iran, Iran targets Coca-Cola

Hot on the heels of UN Security Council sanctions against Iran, US President Barack Obama has signed yet another document imposing even tougher penalties against Iran for its alleged nuclear weapons program.

The Iran Sanctions Act targets exports of gasoline and other refined petroleum products to Iran and bans US banks from doing business with foreign banks providing services to Iran's Revolutionary Guard.

“We are showing the Iranian government that its actions have consequences,” Obama said, warning that if Iran continues its current course, “the pressure will continue to mount, and its isolation will continue to deepen.”

Although Obama insists that the door to diplomacy is still open, he also said, “There should be no doubt – the United States and the international community is determined to prevent Iran from acquiring nuclear weapons.”

The US administration hopes the new unilateral sanctions, along with ones approved last month in the UN Security Council and those imposed by the European Union, will yield results even though previous regimens failed to halt Iran's activities that it asserts could be a precursor to nuclear weapons development.

In his political rhetoric, the US president said he had not sought the outcome, arguing it was chosen by an Iranian government which for years has defied UN resolutions and forged ahead with its nuclear programs while supporting terrorist groups and suppressing the Iranian people.

The legislation was approved by US Senate and House in quick succession on June 24, and Obama called the new law the “toughest sanctions against Iran ever passed by the United States Congress.”

Ahmadinejad strikes back

Even as Obama prepared to sign the bill into law, Iranian president Mahmoud Ahmadinejad decided that a ban on signature American and Western products – among them Coca-Cola, Intel and IBM – would be a fitting retaliation for the sanctions that the UN Security Council approved last month.

However there are mixed reactions coming from Tehran.

On one hand, Iranian officials dismissed the measures, saying they will have no impact on the country’s nuclear progress. Tehran still insists it is aimed at peaceful energy production, but many global powers have come to the conclusion that the program is being conducted with ambitions of nuclear weapon development.

On the other hand, the Iranian government is lashing out over the international actions against it.“The Iranian regime is caught in the contradiction of its relations with its own people, especially with a Westernized young society, and its economic relations with the world. And that is why we see these different responses,” says Bahman Baktiari, director of the Middle East Center at the University of Utah in Salt Lake City.

Baktiari says that Obama’s signing of the sanctions will likely impact cab drivers and other service workers the most.

“Those are the people who risk feeling the biggest impact from these petroleum sanctions,” he says. But, he adds, the wildcard in this situation is that it’s a globally popular American president signing the new law.

“Obama is popular, and many Iranians, especially among the young people, think Obama gave a fair shake to the Iranian government with his offer for unconditional dialogue,” he says. “These new sanctions will have an impact on Iran, but there’s a bigger chance now that people will blame that on the government – and not on the US,” Baktiari believes.

And what of Ahmadinejad’s call for a boycott of Coke and other American products?

“The response is ridicule,” Baktiari says. “Even the most rural Iranian knows these products and associates them with America. If Ahmadinejad really wants to stop these products, he’d have to cut off trade with Dubai and everyone knows he’s not going to do that.”

Missiles: made in Tehran

Meanwhile, Western countries are not the only ones prompting reactions from Tehran. After Russia’s decision to freeze the delivery of S-300 defense systems to the Islamic Republic, Iran unveiled efforts aimed at self-sufficiency in passive air defense.

"At present, Iran is on the path to designing long-range missiles used in passive air defense,” Iranian Defense Minister Ahmad Vahidi told reporters on Thursday.

Russia's move, as well as the Kremlin's "Yes" vote to the US-drafted sanctions resolution, drew sharp criticism from Iranian officials.

Despite unveiling plans of creating its own air defense systems, Tehran has warned Moscow that the sanctions are no excuse for reneging on the deal, since the contract was signed before the adoption of UN sanctions.

“The contract for the S-300 missile defense systems was concluded in the past; it is a defense matter and has nothing to do with the resolution,” Iranian Parliament Speaker Ali Larijani said in a press conference.

Russia’s Nezavisimaya Gazeta daily on Wednesday estimated Moscow's losses in breaching the contract to be over $1 billion, including a $400-million penalty likely to be imposed by Tehran.

The US and its European allies have embraced the "costly" Russian move, after convincing the veto-wielding permanent member of the Security Council to join Washington's sanctions campaign.